Attracting Fdi to export processing zone : A potential tool to reverse poverty trend in Madagascar.

With 92% of poverty rate, Madagascar is one of the poorest countries in the world, a fragile state, and is more likely to remain LDC until 2025. Historically, investment in resource sector has been the main driver of economic growth. Unfortunately, it failed to result into significant poverty reduction while per capita income has been on declining trend since the early 1970s. In order to reverse this trend, productivity growth in nonresource sector is a key policy challenge. However, poor business climate (country’s rank in doingbusiness.org is 167th out of 190) has made such a challenge more likely unsuccessful. Indeed, 75% of workforce whose education level is less than primary’s limits the country’s capital absorptive capacity while making it more difficult the undertaking of productivity driven activity and decent employment creation.

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